How do I arrange my funeral?
If you know how you want your final service and burial to be when you die, you should contact the organisation that you think would be best at carrying out your wishes.
This may be a specific funeral home, or you could approach AFDA for the name of one of their registered firms.
Funeral funds and funeral benefits
Ideally you should arrange for the cost of your funeral while you are still able to, so as to spare your loved ones the task of raising the funds.
Who is responsible for the costs of a funeral?
The person who organises the funeral with the funeral home is responsible as this is a binding contract. However, the person may claim the costs from the deceased’s estate, provided there is enough money in the estate.
The person organising the funeral should check if the deceased had a private funeral policy, or a policy with a funeral home or was entitled to a state bereavement benefit before you pay.
Will the bank give me money to pay for a funeral?
Normally, the banks will advance a portion of what is in the deceased’s bank account to pay for the funeral. You will need to provide a death certificate, and may have to provide other proof of the funeral costs.
When will the state pay for funerals (Destitute Funerals)?
The state will pay for your funeral if:
- You don’t have money to pay in your estate for it when you die and neither do your friends or family
- You have been receiving a Commonwealth pension, and are single when you die or have a spouse of life partner. In these cases, the state will pay out a lump sum to assist with the costs. For the calculation of the amount, see the Social Security Act, sections 82-91, 21 and 315.
- If you die of certain war-related causes after serving your country (see sections 98B and 99 of the Veterans’ Entitlements Act 1986 (Cth))
- If the wife or child of a married serviceman, or unmarried serviceman’s widowed mother or stepmother dies (see section 100 of the Veterans’ Entitlements Act 1986 (Cth).
Contributing to private funeral funds and other schemes
Many people make payments to a private funeral fund while still alive to cover the costs of their funeral. The Funeral Funds Act 1979 states that all such funds must be registered, so if you take out a policy with a fund, make sure that it is registered. You can contact the Registry of Co-operatives and Associations on 1800 502 042 or NSW Fair Trading to find out.
Other schemes such as cash benefit schemes are also ways of funding your funeral. These schemes are often organised by unions at work, and you pay a regular contribution towards them.
Non-cash benefit schemes are when you pay a contribution so that when you die, the scheme pays for your funeral directly to the funeral home. These schemes are often run by the funeral industry.
Each funeral fund or scheme has different rules, and we recommend that you discuss your choice with your financial adviser before contracting with one. Here are some basic questions you need to find out before committing to a funeral plan:
- Must you make a monthly contribution, or a lump sum payment?
- Is there a contract that spells out exactly what you will get when you die?
- If you contract for a set amount towards your funeral, will this be enough in 20 o 30 years’ time to get a decent burial? Or will your family have to top up the amount?
- Will the payout be made to the funeral home, or to your estate?
- Does the fund or scheme guarantee how soon after your death it will be before it pays out the money
- Will you get all your contributions plus interest back?
- If you stop paying, do you lose all previous contributions?
- What are the administration charges?
- If you’ve arranged for your funeral with a specific funeral home and they go out of business, what will happen?
- Are there any circumstances in which you can get a refund, for example, if the funeral home goes out of business?
Other ways of funding your funeral
Instead of contributing to a fund, you can open a separate bank account into which you deposit money specifically to be used for your funeral. Don’t forget to leave instructions in your will about this bank account, or discuss it with your heirs. You can even give someone you trust power of attorney over this account, so they can easily withdraw the funds for your funeral.